1017-00004 · Entities. Aurelius Global Media Group · Class Certification

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CONFIDENTIAL — ATTORNEY-CLIENT PRIVILEGED / ATTORNEY WORK PRODUCT

CALDERWOOD & HARKNESS LLP 1999 Avenue of the Stars, 27th Floor Los Angeles, California 90067 Telephone: (310) 555-8200 Facsimile: (310) 555-8201

MEMORANDUM

TO: Gregory Tanaka, Vice President, Legal & Compliance, Aurelius Media Americas Inc.; Philippa Cartwright, General Counsel, Aurelius Global Media Group

FROM: Renata Vasquez and Devon Archer

DATE: August 14, 2023

RE: Post-Hearing Analysis — Class Certification Order (August 11, 2023), Fuentes v. Aurelius Media Americas Inc., LASC Case No. 22STCV38214 (Consolidated), C&H Matter No. 1017-00004

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I. Executive Summary

On Friday, August 11, 2023, the Honorable Raymond Escobedo, sitting in Department 34 of the Los Angeles Superior Court, issued an Order granting in part and denying in part Plaintiffs' Motion for Class Certification in Fuentes v. Aurelius Media Americas Inc., LASC Case No. 22STCV38214 (Consolidated). This memorandum provides a detailed analysis of the Court's Order, assesses the favorable and unfavorable aspects of the ruling, updates AMA's exposure analysis, and sets forth our recommendations regarding next steps, including settlement strategy, mediation scheduling, and the advisability of interlocutory appellate review.

The Court certified a class on the first meal period auto-deduction claim (First Cause of Action, as limited), the derivative wage statement claim under California Labor Code Section 226 (Fifth Cause of Action), and the UCL claim under California Business and Professions Code Section 17200 (Seventh Cause of Action). The Plaintiffs' PAGA representative claim will proceed alongside the certified class claims, as PAGA claims do not require class certification and instead proceed as representative actions under the statutory framework.

Significantly, the Court denied certification on five other causes of action: the rest period claim, the off-the-clock/overtime claim, the minimum wage claim, the second meal period claim, and the waiting time penalties claim. These denials substantially narrow the scope of class-wide liability and remove the claims that carried the greatest aggregate exposure in Plaintiffs' damages model.

This outcome is substantially consistent with the prediction we outlined in our March 20, 2023 pre-certification strategy memorandum and refined in our July 10, 2023 reply brief analysis. In those submissions, we assessed a 55–60% probability that the Court would certify a class on the meal period auto-deduction claim, given the common-proof issues inherent in AMA's uniform use of the NovaPay Solutions TimeTrack Pro timekeeping system and the inconsistent activation of the Missed Meal Attestation feature across AMA's seven California facilities. The denial of the remaining five causes of action tracks our assessment that these claims would founder on individualized issues related to varying production schedules, supervisory practices, and employee-specific work patterns.

In light of this Order, we recommend proceeding promptly to mediation and provide an updated settlement range of $12–16 million (Gross Settlement Amount). We do not recommend seeking interlocutory appellate review of the certification order, for reasons detailed in Section VI below. Our immediate action items center on scheduling mediation with the Honorable Patricia Okoro (Ret.) at Westpark Dispute Resolution Inc., obtaining settlement authority from the requisite corporate approvals, and engaging Pemberton Mutual Assurance Co. regarding its contribution to any settlement within the recommended range.

II. Detailed Analysis of the Court's Order

We turn now to a detailed, claim-by-claim analysis of the Court's August 11, 2023 Order, addressing both the certified and denied claims, the class definition, the appointment of class representatives and class counsel, and the Court's observations regarding individual damages.

A. Claims Certified

1. First Cause of Action — First Meal Period (Certified)

The centerpiece of the Court's Order is the certification of a class on the first meal period claim. Importantly, the Court limited certification to first meal periods only, declining to extend class treatment to the second meal period claim (discussed separately below in Section II.B.1). This distinction is significant and reflects the Court's recognition that the first and second meal period claims implicate different factual patterns and different levels of commonality.

The Court's reasoning rested primarily on the operation of AMA's TimeTrack Pro auto-deduction system. As the Court explained, the auto-deduction functionality — which automatically deducts thirty minutes from each employee's recorded time for a first meal period, regardless of whether the employee actually took the full thirty-minute break — presented a common question susceptible to common proof. The Court identified that question as follows:

"Did AMA's auto-deduction system, as implemented, deny class members meal period premium pay by automatically deducting 30 minutes without providing an adequate mechanism for employees to report missed or shortened breaks?"

The Court found that this common question "predominates at the liability stage," even while acknowledging that individual damages calculations may ultimately be required. The Court reasoned that the auto-deduction was applied uniformly to all non-exempt, hourly employees across all seven California facilities, and that the system's design — automatically deducting meal period time without requiring affirmative employee input to confirm the break was taken — created a "systemic risk of uncompensated meal period violations" amenable to class-wide adjudication.

Key Ruling on the Attestation Feature. A critical aspect of the Court's analysis concerns AMA's Missed Meal Attestation feature, which was the cornerstone of our opposition to class certification. AMA argued that the attestation feature — a pop-up prompt within the TimeTrack Pro system that asks employees at clock-out whether they missed or were unable to take a full meal period — provided an adequate mechanism for employees to report meal period issues and thus defeated commonality. The feature was activated at four of AMA's seven California facilities: Facility 1 (West Hollywood HQ), Facility 3 (Sherman Oaks), Facility 5 (Hollywood), and Facility 6 (Santa Monica).

The Court rejected this argument. The Court found that the low utilization rates at the four facilities where the attestation feature was active — 2.3% at Facility 1, 4.1% at Facility 3, 1.8% at Facility 5, and 3.7% at Facility 6 — "raise serious questions about whether the feature was effectively communicated to employees." The Court went further, stating that "a mechanism that employees do not know about is functionally equivalent to no mechanism at all." This characterization effectively neutralized the attestation feature as a differentiating factor between the four "active" facilities and the three "inactive" facilities.

Rejection of AMA's Subclass Argument. In the alternative to full denial of certification, AMA proposed that the Court limit certification to a subclass of employees who worked at Facilities 2 (Studio City), 4 (Burbank), and 7 (El Segundo) — the three facilities where the attestation feature was never activated. AMA argued that, at minimum, the employees at these three facilities had no mechanism whatsoever for reporting missed meal periods, and that the claims of employees at the four "active" facilities should be excluded from class treatment because those employees had access to the attestation feature even if utilization was low.

The Court rejected this subclass proposal. The Court found that the low utilization rates across all facilities rendered the distinction between "active" and "inactive" facilities "functionally irrelevant." The Court observed that if the attestation feature was used by fewer than 5% of employees at any facility where it was available, the practical effect of the feature's availability was negligible, and the class members at the four "active" facilities were in substantially the same position as those at the three "inactive" facilities. This ruling has significant consequences for class size: instead of a certified class of approximately 700 individuals (limited to Facilities 2, 4, and 7), the certified class encompasses all approximately 1,850 putative class members across all seven California facilities. We discuss the implications of this expansion in Sections III and IV below.

2. Fifth Cause of Action — Wage Statement (Cal. Lab. Code § 226) (Certified)

The Court certified the wage statement claim under California Labor Code Section 226 as derivative of the meal period claim. The Court's reasoning was straightforward: if AMA's auto-deduction system resulted in the systematic underpayment of meal period premiums to class members, then the wage statements issued to those class members that did not reflect the owed premiums were necessarily inaccurate and incomplete. Because the wage statement claim rises and falls with the underlying meal period claim, the same common question that justified certification of the meal period claim supports certification of the derivative wage statement claim. This result was anticipated and is consistent with the approach taken by California courts in similar wage-and-hour class actions.

Section 226 provides for statutory penalties of $50 for the first violation and $100 for each subsequent violation, per employee, per pay period, up to an aggregate penalty of $4,000 per employee. The aggregate exposure on this claim is discussed in Section IV below.

3. Seventh Cause of Action — UCL (Cal. Bus. & Prof. Code § 17200) (Certified)

The Court also certified the UCL claim under California Business and Professions Code Section 17200, again as derivative of the meal period claim. The UCL "unlawful" prong borrows the underlying Labor Code violation as its predicate — here, the alleged violation of California Labor Code Section 512 and the meal period premium provisions of Section 226.7. Because the UCL claim is parasitic on the meal period claim, certification of the former follows naturally from certification of the latter.

The remedy available under the UCL is limited to restitution and injunctive relief; the UCL does not provide for damages beyond what is recoverable under the underlying Labor Code provisions. Accordingly, the UCL certification does not add incremental damages exposure beyond the meal period premiums themselves, but it does provide Plaintiffs with an additional theory of recovery and an alternative procedural vehicle.

4. PAGA Claim

The Court noted that the PAGA claim proceeds as a representative action under California Labor Code Section 2698 et seq. and does not require class certification. The PAGA framework is distinct from class action procedure: a PAGA plaintiff acts as a proxy for the State of California to recover civil penalties for Labor Code violations, and the representative nature of the action is established by statute rather than by judicial certification under Code of Civil Procedure Section 382.

The Court permitted the PAGA claim to proceed alongside the certified class claims. This was procedurally expected and does not alter the landscape in any material respect. Plaintiffs' claimed PAGA penalties total approximately $12.2 million, but our assessed realistic PAGA settlement component remains in the range of $500,000 to $1.5 million. This assessment is based on the well-established authority of California courts to exercise discretion under Labor Code Section 2699(e)(2) to reduce PAGA penalties where the award would otherwise be "unjust, arbitrary and oppressive, or confiscatory." In our experience, PAGA penalties in settled cases are typically a fraction of the statutory maximum, and mediators and courts routinely apply substantial reductions.

B. Claims Denied

1. First Cause of Action — Second Meal Period (Denied)

The Court denied certification for the second meal period claims — i.e., claims arising from the alleged failure to provide compliant second meal periods to employees who worked shifts exceeding ten hours, as required by California Labor Code Section 512(a). The Court found that the question of whether employees working shifts exceeding ten hours received compliant second meal periods was "too dependent on the specific production schedule and show unit to be resolved on a class-wide basis."

This is a favorable ruling for AMA. The denial reflects the success of our variability argument, which was supported by two key pieces of evidence. First, Dr. Arjun Makhija's statistical analysis demonstrated statistically significant differences in shift lengths and scheduling patterns across AMA's 14 show units, establishing that second meal period eligibility (triggered by shifts exceeding ten hours) varied dramatically depending on the show unit assignment. Studio-based shows typically involved 8- to 10-hour days, while field-based productions frequently involved 12- to 16-hour days. Second, Celine Arroyo's declaration — submitted by AMA's Senior Vice President of Operations — provided a detailed account of the operational distinctions between studio-based and field-based productions, including differences in scheduling authority, break management protocols, and the role of unit production managers in overseeing compliance. The Court credited both of these submissions in concluding that the second meal period claim could not be resolved through common proof.

2. Second Cause of Action — Rest Period (Denied)

The Court denied certification on the rest period claim, finding "no common proof of a systematic failure to provide rest periods." This ruling was grounded in two related observations. First, rest periods are not recorded in the TimeTrack Pro system. This is consistent with standard industry practice in California: because rest periods are paid time (unlike meal periods, which are typically unpaid and thus subject to time deductions), employers are not required to record rest period start and stop times, and most California employers — including AMA — do not do so. The absence of timekeeping data means that Plaintiffs could not point to any systemic evidence of rest period violations comparable to the auto-deduction data that supported the meal period claim.

Second, Plaintiffs' evidence on rest periods was limited to anecdotal testimony from three declarants: named plaintiffs Marisol Fuentes, Derek Halloran, and Yesenia Padilla. Each declarant described different experiences at different facilities, involving different supervisors and different production contexts. The Court found this evidence insufficient to establish a class-wide policy or practice of denying rest periods. The Court's language was pointed: Plaintiffs' showing amounted to "isolated instances of alleged non-compliance that, without more, do not support an inference that AMA maintained a policy or practice of denying rest periods to its non-exempt employees as a class."

3. Third Cause of Action — Overtime / Off-the-Clock Work (Denied)

The Court denied certification on the off-the-clock and overtime claims, finding that the question of whether each employee performed compensable off-the-clock work "is inherently individualized and depends on the employee's specific job duties, show unit, and supervisor's expectations." The Court noted that Plaintiffs did not present evidence of a company-wide policy requiring or encouraging off-the-clock work. Instead, Plaintiffs' theory was that off-the-clock work occurred "in practice" — but the Court found that this practice, to the extent it existed, varied by employee, show unit, role, and supervisory chain, making it unsuitable for class-wide adjudication.

This denial is consistent with the prevailing case law in California, which generally disfavors certification of off-the-clock claims absent evidence of a uniform policy or practice. See, e.g., Brinker Restaurant Corp. v. Superior Court (2012) 53 Cal.4th 1004; Dailey v. Sears, Roebuck & Co. (2013) 214 Cal.App.4th 974.

4. Fourth Cause of Action — Minimum Wage (Denied)

The Court denied certification of the minimum wage claim, finding that it was derivative of the overtime/off-the-clock claim and thus could not proceed on a class-wide basis when the predicate claim was denied certification. Plaintiffs' minimum wage theory was that employees who performed uncompensated off-the-clock work effectively received less than the minimum wage for the hours actually worked. Because the off-the-clock claim was denied, the minimum wage claim necessarily fell with it.

5. Sixth Cause of Action — Waiting Time Penalties (Cal. Lab. Code §§ 201–203) (Denied)

The Court denied certification of the waiting time penalties claim under California Labor Code Sections 201 through 203. The Court found that waiting time penalties "depend on whether individual class members were owed wages at separation, which cannot be determined on a class-wide basis without individual adjudication." Waiting time penalties accrue when an employer willfully fails to pay wages due at the time of separation; the determination of whether wages were owed requires an employee-by-employee analysis of each individual's final pay, accrued and unpaid wages, and the circumstances of separation. The Court concluded that this inherently individualized inquiry precluded class treatment.

C. Class Definition (as Certified)

The Court adopted the following class definition:

"All current and former non-exempt, hourly employees of Aurelius Media Americas Inc. who worked in the State of California at any time from November 1, 2018 through the date of preliminary approval of any class settlement, who were subject to AMA's automatic meal period deduction in the NovaPay Solutions TimeTrack Pro timekeeping system."

The estimated size of the certified class is approximately 1,850 individuals. This figure is derived from AMA's payroll records for the class period and reflects the total population of non-exempt, hourly employees across all seven California facilities who were subject to the TimeTrack Pro auto-deduction. As noted above, the class encompasses employees at all seven facilities — not merely the three facilities where the attestation feature was not activated — due to the Court's rejection of AMA's subclass proposal.

D. Named Class Representatives

The Court approved all three named plaintiffs as class representatives:

• Marisol Fuentes — a former Production Coordinator at Facility 2 (Studio City), employed from March 2019 to September 2021.

• Derek Halloran — a former Post-Production Assistant at Facility 5 (Hollywood), employed from January 2020 to June 2022.

• Yesenia Padilla — a current Audio Technician at Facility 1 (West Hollywood HQ), employed since August 2018.

The Court found that all three named plaintiffs were adequate and typical for the certified claim — the first meal period auto-deduction claim — despite their different facilities, divisions, and employment periods. The Court noted that the uniformity of the TimeTrack Pro auto-deduction across all facilities meant that each representative's claim arose from the same system and the same alleged deficiency, satisfying the typicality and adequacy requirements of California class action law.

E. Class Counsel

The Court appointed the following as class counsel:

• Castellano Byrne & Salas LLP (lead counsel) — represented by Marco Castellano, Diane Salas, and Trevor Kim.

• Veltrano Employment Law Group PC (PAGA co-counsel) — represented by Sandra Higuera.

The appointment of class counsel was not contested by AMA and is consistent with standard practice.

F. Court's Observation on Individual Damages

Finally, we note an important observation the Court made regarding damages. The Court commented that "individual damages calculations may be required" even within the certified class. This observation signals that, even on the certified first meal period claim, the Court recognizes that determining the specific amount of damages owed to each individual class member may require individualized inquiry — for example, identifying the specific shifts on which each employee missed a meal period, whether the employee was entitled to a premium for that shift, and the applicable hourly rate.

This observation has two practical implications. First, it preserves AMA's argument that damages are not susceptible to formulaic, class-wide calculation, which could complicate any future trial on damages. Second, and more importantly for settlement purposes, it provides leverage in settlement negotiations: Plaintiffs and their counsel may prefer a streamlined settlement with an agreed-upon allocation methodology over the complexity, expense, and risk of individualized damages proceedings. This dynamic tends to favor a negotiated resolution.

III. Assessment — Favorable and Unfavorable Aspects

We assess the Court's Order as a mixed result that, on balance, is more favorable than unfavorable to AMA. The denial of five of seven causes of action substantially narrows AMA's class-wide exposure and validates the defense strategy we have pursued throughout the certification process. However, the certification of the meal period auto-deduction claim — and in particular, the Court's rejection of the subclass argument and its characterization of the attestation feature — creates meaningful trial risk on the surviving certified claims.

A. Favorable Rulings

1. Denial of Certification on Five of Seven Causes of Action. The most significant favorable aspect of the Order is the denial of class certification on the rest period, off-the-clock/overtime, minimum wage, second meal period, and waiting time penalties claims. These were, collectively, the most exposure-heavy claims in Plaintiffs' case. Dr. Rennick's damages model attributed over $20 million in aggregate damages to these five claims (see Section IV.A below). Their exclusion from class treatment eliminates the prospect of class-wide liability on these theories and relegates them to individual claims that most class members are unlikely to pursue independently. Moreover, the claims that were denied — particularly the rest period and off-the-clock claims — were the most factually and legally uncertain for AMA, precisely because of their individualized nature. The denial of class treatment on these claims removes the systemic risk associated with them.

2. Dr. Makhija's Analysis Vindicated in Part. The Court credited AMA's variability evidence in denying certification on several claims, particularly the second meal period, rest period, and off-the-clock claims. Dr. Makhija's statistical analysis — which demonstrated statistically significant differences in shift lengths, scheduling patterns, and supervisory practices across AMA's 14 show units and 7 facilities — was central to this result. The Court accepted that working conditions varied significantly across the enterprise and that this variation precluded common proof on the denied claims. This vindication of Dr. Makhija's work also positions AMA favorably for trial on the certified meal period claim, to the extent AMA can argue that even within the certified class, individual variation may affect the merits and damages determinations.

3. Individual Damages Observation. The Court's comment that "individual damages calculations may be required" preserves AMA's argument that damages cannot be determined on a class-wide basis through a single formula or calculation. As discussed in Section II.F above, this creates leverage in settlement negotiations by increasing the complexity and risk that Plaintiffs would face in a damages phase, incentivizing Plaintiffs to accept a reasonable settlement rather than proceeding to a contested damages determination.

B. Unfavorable Rulings

1. Rejection of the Facility-Based Subclass Argument. The Court's refusal to limit the certified class to the three facilities where the attestation feature was not activated is the most consequential unfavorable ruling. The Court's finding that the low attestation feature utilization rates (ranging from 1.8% to 4.1%) at the four "active" facilities made the distinction between active and inactive facilities "functionally irrelevant" expands the certified class from a potential approximately 700 members (at Facilities 2, 4, and 7 only) to the full approximately 1,850 putative class members across all seven facilities. This expansion increases both the damages exposure and the settlement value of the case. It also undermines a key element of AMA's defense narrative — namely, that AMA took affirmative steps to provide a mechanism for reporting missed meal periods at the majority of its facilities.

2. The Court's Characterization of the Attestation Feature. The Court's statement that "a mechanism that employees do not know about is functionally equivalent to no mechanism at all" is a strong and unfavorable merits signal. This characterization essentially treats AMA's auto-deduction system as universally deficient, regardless of whether the attestation feature was technically available at a given facility. If this framing carries through to trial, it would significantly advantage Plaintiffs' argument that AMA bore the burden of ensuring employees were aware of and able to use the attestation feature, and that AMA's failure to achieve meaningful utilization rates amounts to a systemic violation. While this characterization was made in the context of a certification ruling — and the Court did not reach the ultimate merits — it nevertheless telegraphs the Court's likely view of the evidence and creates an unfavorable backdrop for any trial.

3. Breadth of the Common Question. The Court framed the common question broadly: whether the auto-deduction system denied meal period premium pay "without providing an adequate mechanism for employees to report missed or shortened breaks." This formulation tilts the merits analysis toward Plaintiffs because it focuses on the adequacy of the mechanism rather than on whether individual employees actually missed meal periods. At trial, AMA would prefer a narrower framing that requires each class member to prove that he or she actually missed a meal period and was denied a premium. The broad framing adopted by the Court suggests that the liability inquiry may center on the system's design and implementation, which is inherently common, rather than on individual employee experiences, which would be more favorable to AMA.

C. Neutral Aspects

The certification of the wage statement (Section 226) and UCL (Section 17200) claims is a neutral development. These claims are purely derivative of the underlying meal period claim and would have been certified under any scenario in which the meal period claim was certified. Their inclusion in the certified class does not materially alter AMA's exposure or strategy.

Similarly, the PAGA claim proceeding as a representative action is procedurally standard and was expected regardless of the outcome of the class certification motion. The PAGA framework operates independently of class certification, and the continued pendency of the PAGA claim was a foregone conclusion.

IV. Impact on Exposure Analysis

A. Reduced Exposure from Denied Claims

The denial of five of seven causes of action significantly reduces AMA's aggregate exposure. Plaintiffs' expert, Dr. Carolyn Rennick, presented a total damages figure of approximately $38.6 million across all claims. A substantial portion of that figure was attributable to the claims that were denied certification:

• Rest period premiums: approximately $8.4 million

• Off-the-clock overtime (adjusted): approximately $12.2 million

• Wage statement penalties (derivative of denied claims): a partial component, estimated at $0.5–1.0 million attributable to the denied underlying claims

• Waiting time penalties: included in Dr. Rennick's total, with the specific allocation embedded in the aggregate figure

With the denial of these claims, Dr. Rennick's headline damages figure is reduced dramatically. The remaining exposure is concentrated on the certified claims: the first meal period auto-deduction claim, the derivative wage statement claim, the UCL claim, and the PAGA penalties.

B. Defense Expert Comparison

AMA's defense expert, Dr. Eric Lindstrom, presented an aggregate damages estimate of approximately $5.8 million (excluding PAGA penalties). Dr. Lindstrom's methodology differed from Dr. Rennick's in several critical respects: Dr. Lindstrom applied a more conservative assumption regarding the frequency of actual meal period violations (as opposed to the mere application of the auto-deduction), used AMA's own TimeTrack Pro records to identify shifts where the recorded clock-in and clock-out times were consistent with a full meal period having been taken, and applied a lower hourly rate based on the weighted average of class member wages.

Importantly, Dr. Lindstrom's $5.8 million estimate was primarily attributable to the meal period and wage statement claims — that is, the claims that were certified. The claims that were denied accounted for only a small portion of Dr. Lindstrom's total because his methodology already reflected the individualized nature of those claims and the limited evidence supporting them. This means that Dr. Lindstrom's estimate remains largely intact as a defense valuation for the certified claims and provides a credible basis for AMA's position in settlement negotiations.

C. Updated Realistic Exposure Range

Based on our analysis of the Court's Order, the narrowing of certified claims, and the competing expert analyses, we present the following updated exposure table:

Our assessed realistic exposure range of $5–8 million reflects a midpoint between the parties' expert positions, adjusted for the Court's unfavorable characterization of the attestation feature (which increases Plaintiffs' merits leverage) and discounted for the inherent risk that Plaintiffs would face in proving individual damages at trial even on the certified claim. The PAGA component is assessed at the low end of the claimed range, consistent with the substantial judicial discretion to reduce PAGA penalties and the established pattern of PAGA settlements at a fraction of the statutory maximum.

V. Implications for Settlement Strategy

A. Updated Settlement Range

In our pre-certification settlement authority memorandum (dated August 15, 2023), we recommended a settlement range of $10–15 million. In light of the Court's Order, we update our recommendation as follows:

Updated recommended settlement range: $12–16 million (Gross Settlement Amount).

The rationale for adjusting the range upward from the pre-certification recommendation is twofold. First, the partial certification represents a moderately unfavorable development in that the certified class is broader than we had hoped. The rejection of the facility-based subclass argument expanded the class from approximately 700 to approximately 1,850 members, increasing the aggregate damages exposure proportionally. Second, the Court's unfavorable characterization of the attestation feature — and in particular the finding that the feature's low utilization rates render it "functionally" equivalent to no mechanism at all — increases Plaintiffs' leverage on the merits of the certified claim. In any settlement negotiation, Plaintiffs' counsel will point to this language as an indication that the Court has already signaled a favorable view of Plaintiffs' theory.

At the same time, the denial of five of seven causes of action significantly limits AMA's overall exposure and provides a strong counterargument in settlement discussions. The core message to Plaintiffs should be that while the certified meal period claim presents real trial risk, the vast majority of claims in the case have been denied class treatment, and Plaintiffs' remaining exposure is a fraction of their original $38.6 million ask.

The settlement should be structured to provide for a broad release of all class and PAGA claims, including the non-certified claims (rest period, off-the-clock, overtime, waiting time, minimum wage). A broad release is essential to eliminate the risk that individual class members pursue the non-certified claims through separate litigation. While the non-certified claims cannot be released through the class mechanism (because they were not certified), the settlement can be structured as a combined class and PAGA settlement in which individual class members who do not opt out are deemed to release all claims — certified and non-certified — arising from the facts alleged in the operative complaint. This structure is standard in California wage-and-hour class settlements and has been approved by courts routinely.

B. EPL Coverage Implications

AMA's employment practices liability policy with Pemberton Mutual Assurance Co. (Policy No. PMA-EPL-2022-00837) has been tendered and Pemberton has acknowledged coverage, subject to a reservation of rights as to PAGA penalties and claims arising from willful violations. The policy provides a $15 million aggregate limit with a $5 million self-insured retention (SIR). Defense costs incurred to date total approximately $2.8 million, substantially exhausting the SIR.

At a settlement in the recommended $12–16 million range, Pemberton's authorized contribution of up to $9.25 million — calculated as the $15 million aggregate limit, less the $5 million SIR (of which approximately $2.8 million has been applied to defense costs, with the remaining approximately $2.2 million to be applied to the settlement itself) — would cover the majority of the GSA. AMA's self-funded share at a $14–15 million settlement would be approximately $5–6 million, consisting of the remaining SIR amount plus any settlement amount exceeding Pemberton's authorized contribution.

We should engage Pemberton immediately to confirm the carrier's willingness to contribute within this range and to address any allocation concerns regarding the PAGA component. Pemberton's reservation of rights on PAGA penalties means that the carrier may resist contributing to the portion of the settlement allocated to PAGA civil penalties, as opposed to compensatory wage-and-hour damages. The settlement structure should be designed to maximize the allocation to covered wage-and-hour claims and minimize the PAGA allocation, consistent with the realistic PAGA exposure assessment of $500,000 to $1.5 million. Bernard Crawford of our firm's insurance recovery practice group will handle carrier coordination.

C. Mediation Timing

The Court's certification order strongly positions the case for immediate mediation. Post-certification is a natural inflection point for settlement discussions: both sides now have clarity on the scope of class-wide claims, the certified class size, and the legal framework within which any trial would proceed. Delaying mediation would serve no strategic purpose and could result in additional defense costs and the risk of further unfavorable developments.

We recommend scheduling Mediation Session #1 within two to three weeks — targeting the week of August 21–25, 2023, or, if scheduling conflicts prevent that timing, the week of August 28 through September 1, 2023.

The agreed-upon mediator is the Honorable Patricia Okoro (Ret.) of Westpark Dispute Resolution Inc., located at 1925 Century Park East, Suite 1700, Los Angeles, California 90067. Both sides previously proposed and agreed to Judge Okoro as the mediator for this matter, and her office has confirmed general availability during the late August timeframe. Judge Okoro has extensive experience with complex employment class actions in Los Angeles and is well-respected by both the plaintiff and defense bars. Her familiarity with the dynamics of partial certification cases and the PAGA framework will be an asset in facilitating a productive negotiation.

We also recommend considering the possibility of combining the class action mediation with the Aldrich individual action (Case No. 22STCV41087, pending before Hon. Catherine Villanueva, Department 52). The Aldrich matter involves separate but related claims by a former AMA executive, and resolving both matters through a coordinated mediation process would achieve comprehensive finality for AMA. If Mediation Session #1 focuses exclusively on the class action, a Mediation Session #2 could be scheduled to address both the class action (if Session #1 does not result in a resolution) and the Aldrich matter jointly. This approach would allow AMA to achieve a global resolution of its California employment litigation exposure.

VI. Interlocutory Appellate Review — Not Recommended

Under California law, AMA has the right to seek interlocutory appellate review of the certification order by petitioning the Court of Appeal for a writ of mandate pursuant to California Rules of Court, Rule 8.495 et seq. A writ petition would ask the appellate court to vacate or modify the trial court's certification order. We have carefully considered this option and recommend against it for the following reasons:

1. The Partial Certification Order Is Defensible. The Court applied the correct legal framework, relying on the California Supreme Court's decisions in Brinker Restaurant Corp. v. Superior Court (2012) 53 Cal.4th 1004, Sav-On Drug Stores, Inc. v. Superior Court (2004) 34 Cal.4th 319, and Duran v. U.S. Bank National Assn. (2014) 59 Cal.4th 1. The Court made factual findings supported by the record, including the auto-deduction data and the attestation feature utilization rates. While we disagree with the Court's characterization of the attestation feature and its rejection of the subclass argument, these were factual determinations within the trial court's discretion, and an appellate court would review them under a deferential standard.

2. Appellate Review Is Discretionary and Rarely Granted. Unlike appeals of right, writ petitions challenging certification orders are subject to the appellate court's discretionary decision whether to issue an order to show cause and entertain the petition on the merits. The California Courts of Appeal grant such petitions in a small minority of cases, and the standard for intervention is high: the petitioner must demonstrate that the trial court's order constitutes a clear abuse of discretion or a departure from established legal principles. Given the defensible nature of the order, the likelihood of the Court of Appeal granting review is low.

3. Appellate Proceedings Would Cause Substantial Delay. Even if review were granted, the appellate process would delay resolution of the case by an estimated 12 to 18 months. During that period, defense costs would continue to accrue, and AMA would remain exposed to the risk of an unfavorable trial outcome if the certification order were ultimately upheld. The delay would also forfeit the current window for settlement negotiations at a time when both sides have strong incentives to resolve the case.

4. The Denial of Five of Seven Causes of Action Is a Strong Result. Seeking appellate review of the partial grant of certification risks "winning the battle but losing the war." An appellate challenge would draw judicial attention to the certified meal period claim — arguably the strongest claim in Plaintiffs' case — and could result in unfavorable appellate dicta on the merits. Moreover, Plaintiffs could cross-petition for review of the denial of certification on the five denied claims, potentially reopening issues that are currently resolved in AMA's favor.

5. Cost-Benefit Analysis Disfavors Appellate Review. The estimated cost of appellate proceedings — including preparation of the writ petition, the record on appeal, briefing, and oral argument — is in the range of $200,000 to $300,000. This expenditure is disproportionate to the marginal benefit that might be obtained (at best, a reduction in the certified class from approximately 1,850 to approximately 700 members), particularly when weighed against the cost savings of a prompt settlement within the recommended $12–16 million range.

For all of these reasons, we strongly recommend that AMA not pursue interlocutory appellate review and instead direct its resources toward achieving a favorable settlement through mediation.

VII. Recommendations

Based on the foregoing analysis, we make the following recommendations:

1. Do Not Seek Interlocutory Appellate Review. The partial certification order represents the expected outcome, and the risk-reward calculus does not favor an appeal. The order is defensible, appellate review is discretionary and rarely granted, and the process would delay resolution by 12 to 18 months at a cost of $200,000 to $300,000. AMA's resources are better allocated to settlement efforts.

2. Proceed to Mediation Promptly. We recommend contacting the Honorable Patricia Okoro (Ret.) at Westpark Dispute Resolution Inc. immediately to schedule Mediation Session #1 for late August 2023, targeting the week of August 21–25, 2023. If that week is unavailable, we should secure the earliest available date in the following two weeks. We will coordinate with Castellano Byrne & Salas LLP and Veltrano Employment Law Group PC on scheduling.

3. Prepare a Settlement Authority Memorandum. We will prepare a settlement authority memorandum for client approval recommending authority of $12–16 million for the class action (Gross Settlement Amount), with a combined authority covering the Aldrich matter ($1.5–3.0 million) if both matters are addressed in the same mediation process. The total maximum authority sought will be up to $18 million. We note that settlement authority exceeding $5 million requires approval from Jonathan Mercer, President of AMA, and the AGMG Board's Audit and Risk Committee, pursuant to Section 7.4 of AMA's Outside Counsel Guidelines. We recommend that this approval process be initiated immediately to ensure that AMA has the necessary authority in place before the mediation session.

4. Engage Pemberton Mutual Assurance Co. Immediately. Bernard Crawford of our insurance recovery practice group will send an updated claim information letter to Pemberton advising of the certification order, the anticipated settlement range, and the need for Pemberton to authorize a contribution within the identified range. The letter should address allocation concerns regarding the PAGA component and request a meeting with Pemberton's claims adjuster to discuss the settlement structure. We recommend that the claim information letter be sent no later than Wednesday, August 16, 2023, to allow sufficient time for Pemberton to respond before the mediation session.

5. Prepare a Mediation Brief. We will prepare a comprehensive mediation brief that accomplishes the following objectives:

(a) Frames the partial certification as a mixed result that creates substantial trial risk for Plaintiffs on the merits. Even with the auto-deduction common question certified, Plaintiffs must still prove at trial that individual class members actually missed meal periods and were denied premium pay. This is a heavy evidentiary lift, particularly in the absence of individual testimony from each of the approximately 1,850 class members.

(b) Presents AMA's assessment of realistic exposure ($5–8 million) using Dr. Lindstrom's analysis, which remains largely intact for the certified claims and provides a credible basis for AMA's valuation.

(c) Structures a proposed settlement to maximize Pemberton's contribution by allocating payments to covered wage-and-hour claims (meal period premiums and wage statement penalties) and minimizing the allocation to the PAGA component, which is subject to Pemberton's reservation of rights.

6. Consider the Aldrich Matter Timing. The Aldrich individual action (Case No. 22STCV41087) remains pending before the Honorable Catherine Villanueva in Department 52. AMA's cross-claims in the Aldrich matter — including claims for breach of the Employment Agreement (Section 9.4, restrictive covenants), trade secret misappropriation under the California Uniform Trade Secrets Act (CUTSA), breach of fiduciary duty, and conversion — provide AMA with affirmative leverage in that proceeding. The class certification order in the Fuentes matter has no direct legal bearing on the Aldrich matter, but resolving both matters through a coordinated mediation process would achieve comprehensive finality for AMA and eliminate the distraction and expense of ongoing parallel litigation.

7. Continue Monitoring the Non-Certified Claims. Although the rest period, off-the-clock, overtime, minimum wage, and waiting time claims were denied class treatment, these claims remain available to individual class members. Any class settlement should include a broad release covering all claims — both certified and non-certified — arising from the facts and circumstances alleged in the operative complaint, to prevent follow-on individual litigation. We will work with class counsel and the mediator to structure the release language to achieve this objective, consistent with prevailing standards for California wage-and-hour class settlements.

VIII. Conclusion

The August 11, 2023 partial certification order is a manageable outcome that positions the case for a favorable settlement. The denial of the majority of Plaintiffs' claims — including the rest period, off-the-clock/overtime, minimum wage, second meal period, and waiting time claims — substantially narrows AMA's class-wide exposure and eliminates the prospect of class-wide liability on the most speculative and exposure-heavy theories in Plaintiffs' case.

The certification of the first meal period auto-deduction claim was the expected result, given the common-proof issues created by AMA's uniform use of the TimeTrack Pro timekeeping system and the gaps in the activation and communication of the Missed Meal Attestation feature. While the Court's rejection of the subclass argument and its unfavorable characterization of the attestation feature expand the certified class beyond our preferred outcome, these rulings do not fundamentally alter the settlement calculus. The updated settlement range of $12–16 million (GSA) reflects these dynamics and accounts for both the increased leverage Plaintiffs derive from the broader class and the reduced exposure resulting from the denial of the majority of claims.

AMA's immediate priorities are:

1. Schedule mediation with Hon. Patricia Okoro (Ret.) for late August 2023;

2. Obtain settlement authority of up to $18 million (combined) through the required corporate approval channels;

3. Engage Pemberton Mutual Assurance Co. regarding settlement contribution authorization and PAGA allocation; and

4. Prepare mediation materials, including a comprehensive mediation brief.

We are available to discuss this analysis at the client team's convenience and recommend a strategy call this week — ideally Wednesday, August 16, or Thursday, August 17 — to align on next steps and confirm the action items set forth in this memorandum. Please let us know your availability.

CALDERWOOD & HARKNESS LLP

By: ________

Renata Vasquez, Partner Employment Litigation Practice Group

By: ________

Devon Archer, Senior Associate Employment Litigation Practice Group

CONFIDENTIAL — ATTORNEY-CLIENT PRIVILEGED / ATTORNEY WORK PRODUCT This memorandum is a privileged and confidential communication prepared by Calderwood & Harkness LLP for the exclusive use of Aurelius Media Americas Inc. and Aurelius Global Media Group. This memorandum is protected by the attorney-client privilege and the attorney work product doctrine. It should not be disclosed to any third party without prior written consent of counsel. Disclosure to any third party may result in waiver of applicable privileges.

Component	Plaintiffs' Position	Defense Position	Our Assessment
First Meal Period Premiums	$16.3M	$3.4M	$4–6M
Wage Statement (§ 226)	$1.5M	$0.8M	$0.5–1.0M
PAGA Penalties	$12.2M	$0.5–1.0M	$0.5–1.0M
UCL Restitution	Derivative	Derivative	$0 incremental
Total	~$30M	~$5M	$5–8M

CONFIDENTIAL — ATTORNEY-CLIENT PRIVILEGED / ATTORNEY WORK PRODUCT
CALDERWOOD & HARKNESS LLP 1999 Avenue of the Stars, 27th Floor Los Angeles, California 90067 Telephone: (310) 555-8200 Facsimile: (310) 555-8201
MEMORANDUM
TO: Gregory Tanaka, Vice President, Legal & Compliance, Aurelius Media Americas Inc.; Philippa Cartwright, General Counsel, Aurelius Global Media Group
FROM: Renata Vasquez and Devon Archer
DATE: August 14, 2023
RE: Post-Hearing Analysis — Class Certification Order (August 11, 2023), Fuentes v. Aurelius Media Americas Inc., LASC Case No. 22STCV38214 (Consolidated), C&H Matter No. 1017-00004
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I. Executive Summary
On Friday, August 11, 2023, the Honorable Raymond Escobedo, sitting in Department 34 of the Los Angeles Superior Court, issued an Order granting in part and denying in part Plaintiffs' Motion for Class Certification in Fuentes v. Aurelius Media Americas Inc., LASC Case No. 22STCV38214 (Consolidated). This memorandum provides a detailed analysis of the Court's Order, assesses the favorable and unfavorable aspects of the ruling, updates AMA's exposure analysis, and sets forth our recommendations regarding next steps, including settlement strategy, mediation scheduling, and the advisability of interlocutory appellate review.
The Court certified a class on the first meal period auto-deduction claim (First Cause of Action, as limited), the derivative wage statement claim under California Labor Code Section 226 (Fifth Cause of Action), and the UCL claim under California Business and Professions Code Section 17200 (Seventh Cause of Action). The Plaintiffs' PAGA representative claim will proceed alongside the certified class claims, as PAGA claims do not require class certification and instead proceed as representative actions under the statutory framework.
Significantly, the Court denied certification on five other causes of action: the rest period claim, the off-the-clock/overtime claim, the minimum wage claim, the second meal period claim, and the waiting time penalties claim. These denials substantially narrow the scope of class-wide liability and remove the claims that carried the greatest aggregate exposure in Plaintiffs' damages model.
This outcome is substantially consistent with the prediction we outlined in our March 20, 2023 pre-certification strategy memorandum and refined in our July 10, 2023 reply brief analysis. In those submissions, we assessed a 55–60% probability that the Court would certify a class on the meal period auto-deduction claim, given the common-proof issues inherent in AMA's uniform use of the NovaPay Solutions TimeTrack Pro timekeeping system and the inconsistent activation of the Missed Meal Attestation feature across AMA's seven California facilities. The denial of the remaining five causes of action tracks our assessment that these claims would founder on individualized issues related to varying production schedules, supervisory practices, and employee-specific work patterns.
In light of this Order, we recommend proceeding promptly to mediation and provide an updated settlement range of $12–16 million (Gross Settlement Amount). We do not recommend seeking interlocutory appellate review of the certification order, for reasons detailed in Section VI below. Our immediate action items center on scheduling mediation with the Honorable Patricia Okoro (Ret.) at Westpark Dispute Resolution Inc., obtaining settlement authority from the requisite corporate approvals, and engaging Pemberton Mutual Assurance Co. regarding its contribution to any settlement within the recommended range.
II. Detailed Analysis of the Court's Order
We turn now to a detailed, claim-by-claim analysis of the Court's August 11, 2023 Order, addressing both the certified and denied claims, the class definition, the appointment of class representatives and class counsel, and the Court's observations regarding individual damages.
A. Claims Certified
1. First Cause of Action — First Meal Period (Certified)
The centerpiece of the Court's Order is the certification of a class on the first meal period claim. Importantly, the Court limited certification to first meal periods only, declining to extend class treatment to the second meal period claim (discussed separately below in Section II.B.1). This distinction is significant and reflects the Court's recognition that the first and second meal period claims implicate different factual patterns and different levels of commonality.
The Court's reasoning rested primarily on the operation of AMA's TimeTrack Pro auto-deduction system. As the Court explained, the auto-deduction functionality — which automatically deducts thirty minutes from each employee's recorded time for a first meal period, regardless of whether the employee actually took the full thirty-minute break — presented a common question susceptible to common proof. The Court identified that question as follows:
"Did AMA's auto-deduction system, as implemented, deny class members meal period premium pay by automatically deducting 30 minutes without providing an adequate mechanism for employees to report missed or shortened breaks?"
The Court found that this common question "predominates at the liability stage," even while acknowledging that individual damages calculations may ultimately be required. The Court reasoned that the auto-deduction was applied uniformly to all non-exempt, hourly employees across all seven California facilities, and that the system's design — automatically deducting meal period time without requiring affirmative employee input to confirm the break was taken — created a "systemic risk of uncompensated meal period violations" amenable to class-wide adjudication.
Key Ruling on the Attestation Feature. A critical aspect of the Court's analysis concerns AMA's Missed Meal Attestation feature, which was the cornerstone of our opposition to class certification. AMA argued that the attestation feature — a pop-up prompt within the TimeTrack Pro system that asks employees at clock-out whether they missed or were unable to take a full meal period — provided an adequate mechanism for employees to report meal period issues and thus defeated commonality. The feature was activated at four of AMA's seven California facilities: Facility 1 (West Hollywood HQ), Facility 3 (Sherman Oaks), Facility 5 (Hollywood), and Facility 6 (Santa Monica).
The Court rejected this argument. The Court found that the low utilization rates at the four facilities where the attestation feature was active — 2.3% at Facility 1, 4.1% at Facility 3, 1.8% at Facility 5, and 3.7% at Facility 6 — "raise serious questions about whether the feature was effectively communicated to employees." The Court went further, stating that "a mechanism that employees do not know about is functionally equivalent to no mechanism at all." This characterization effectively neutralized the attestation feature as a differentiating factor between the four "active" facilities and the three "inactive" facilities.
Rejection of AMA's Subclass Argument. In the alternative to full denial of certification, AMA proposed that the Court limit certification to a subclass of employees who worked at Facilities 2 (Studio City), 4 (Burbank), and 7 (El Segundo) — the three facilities where the attestation feature was never activated. AMA argued that, at minimum, the employees at these three facilities had no mechanism whatsoever for reporting missed meal periods, and that the claims of employees at the four "active" facilities should be excluded from class treatment because those employees had access to the attestation feature even if utilization was low.
The Court rejected this subclass proposal. The Court found that the low utilization rates across all facilities rendered the distinction between "active" and "inactive" facilities "functionally irrelevant." The Court observed that if the attestation feature was used by fewer than 5% of employees at any facility where it was available, the practical effect of the feature's availability was negligible, and the class members at the four "active" facilities were in substantially the same position as those at the three "inactive" facilities. This ruling has significant consequences for class size: instead of a certified class of approximately 700 individuals (limited to Facilities 2, 4, and 7), the certified class encompasses all approximately 1,850 putative class members across all seven California facilities. We discuss the implications of this expansion in Sections III and IV below.
2. Fifth Cause of Action — Wage Statement (Cal. Lab. Code § 226) (Certified)
The Court certified the wage statement claim under California Labor Code Section 226 as derivative of the meal period claim. The Court's reasoning was straightforward: if AMA's auto-deduction system resulted in the systematic underpayment of meal period premiums to class members, then the wage statements issued to those class members that did not reflect the owed premiums were necessarily inaccurate and incomplete. Because the wage statement claim rises and falls with the underlying meal period claim, the same common question that justified certification of the meal period claim supports certification of the derivative wage statement claim. This result was anticipated and is consistent with the approach taken by California courts in similar wage-and-hour class actions.
Section 226 provides for statutory penalties of $50 for the first violation and $100 for each subsequent violation, per employee, per pay period, up to an aggregate penalty of $4,000 per employee. The aggregate exposure on this claim is discussed in Section IV below.
3. Seventh Cause of Action — UCL (Cal. Bus. & Prof. Code § 17200) (Certified)
The Court also certified the UCL claim under California Business and Professions Code Section 17200, again as derivative of the meal period claim. The UCL "unlawful" prong borrows the underlying Labor Code violation as its predicate — here, the alleged violation of California Labor Code Section 512 and the meal period premium provisions of Section 226.7. Because the UCL claim is parasitic on the meal period claim, certification of the former follows naturally from certification of the latter.
The remedy available under the UCL is limited to restitution and injunctive relief; the UCL does not provide for damages beyond what is recoverable under the underlying Labor Code provisions. Accordingly, the UCL certification does not add incremental damages exposure beyond the meal period premiums themselves, but it does provide Plaintiffs with an additional theory of recovery and an alternative procedural vehicle.
4. PAGA Claim
The Court noted that the PAGA claim proceeds as a representative action under California Labor Code Section 2698 et seq. and does not require class certification. The PAGA framework is distinct from class action procedure: a PAGA plaintiff acts as a proxy for the State of California to recover civil penalties for Labor Code violations, and the representative nature of the action is established by statute rather than by judicial certification under Code of Civil Procedure Section 382.
The Court permitted the PAGA claim to proceed alongside the certified class claims. This was procedurally expected and does not alter the landscape in any material respect. Plaintiffs' claimed PAGA penalties total approximately $12.2 million, but our assessed realistic PAGA settlement component remains in the range of $500,000 to $1.5 million. This assessment is based on the well-established authority of California courts to exercise discretion under Labor Code Section 2699(e)(2) to reduce PAGA penalties where the award would otherwise be "unjust, arbitrary and oppressive, or confiscatory." In our experience, PAGA penalties in settled cases are typically a fraction of the statutory maximum, and mediators and courts routinely apply substantial reductions.
B. Claims Denied
1. First Cause of Action — Second Meal Period (Denied)
The Court denied certification for the second meal period claims — i.e., claims arising from the alleged failure to provide compliant second meal periods to employees who worked shifts exceeding ten hours, as required by California Labor Code Section 512(a). The Court found that the question of whether employees working shifts exceeding ten hours received compliant second meal periods was "too dependent on the specific production schedule and show unit to be resolved on a class-wide basis."
This is a favorable ruling for AMA. The denial reflects the success of our variability argument, which was supported by two key pieces of evidence. First, Dr. Arjun Makhija's statistical analysis demonstrated statistically significant differences in shift lengths and scheduling patterns across AMA's 14 show units, establishing that second meal period eligibility (triggered by shifts exceeding ten hours) varied dramatically depending on the show unit assignment. Studio-based shows typically involved 8- to 10-hour days, while field-based productions frequently involved 12- to 16-hour days. Second, Celine Arroyo's declaration — submitted by AMA's Senior Vice President of Operations — provided a detailed account of the operational distinctions between studio-based and field-based productions, including differences in scheduling authority, break management protocols, and the role of unit production managers in overseeing compliance. The Court credited both of these submissions in concluding that the second meal period claim could not be resolved through common proof.
2. Second Cause of Action — Rest Period (Denied)
The Court denied certification on the rest period claim, finding "no common proof of a systematic failure to provide rest periods." This ruling was grounded in two related observations. First, rest periods are not recorded in the TimeTrack Pro system. This is consistent with standard industry practice in California: because rest periods are paid time (unlike meal periods, which are typically unpaid and thus subject to time deductions), employers are not required to record rest period start and stop times, and most California employers — including AMA — do not do so. The absence of timekeeping data means that Plaintiffs could not point to any systemic evidence of rest period violations comparable to the auto-deduction data that supported the meal period claim.
Second, Plaintiffs' evidence on rest periods was limited to anecdotal testimony from three declarants: named plaintiffs Marisol Fuentes, Derek Halloran, and Yesenia Padilla. Each declarant described different experiences at different facilities, involving different supervisors and different production contexts. The Court found this evidence insufficient to establish a class-wide policy or practice of denying rest periods. The Court's language was pointed: Plaintiffs' showing amounted to "isolated instances of alleged non-compliance that, without more, do not support an inference that AMA maintained a policy or practice of denying rest periods to its non-exempt employees as a class."
3. Third Cause of Action — Overtime / Off-the-Clock Work (Denied)
The Court denied certification on the off-the-clock and overtime claims, finding that the question of whether each employee performed compensable off-the-clock work "is inherently individualized and depends on the employee's specific job duties, show unit, and supervisor's expectations." The Court noted that Plaintiffs did not present evidence of a company-wide policy requiring or encouraging off-the-clock work. Instead, Plaintiffs' theory was that off-the-clock work occurred "in practice" — but the Court found that this practice, to the extent it existed, varied by employee, show unit, role, and supervisory chain, making it unsuitable for class-wide adjudication.
This denial is consistent with the prevailing case law in California, which generally disfavors certification of off-the-clock claims absent evidence of a uniform policy or practice. See, e.g., Brinker Restaurant Corp. v. Superior Court (2012) 53 Cal.4th 1004; Dailey v. Sears, Roebuck & Co. (2013) 214 Cal.App.4th 974.
4. Fourth Cause of Action — Minimum Wage (Denied)
The Court denied certification of the minimum wage claim, finding that it was derivative of the overtime/off-the-clock claim and thus could not proceed on a class-wide basis when the predicate claim was denied certification. Plaintiffs' minimum wage theory was that employees who performed uncompensated off-the-clock work effectively received less than the minimum wage for the hours actually worked. Because the off-the-clock claim was denied, the minimum wage claim necessarily fell with it.
5. Sixth Cause of Action — Waiting Time Penalties (Cal. Lab. Code §§ 201–203) (Denied)
The Court denied certification of the waiting time penalties claim under California Labor Code Sections 201 through 203. The Court found that waiting time penalties "depend on whether individual class members were owed wages at separation, which cannot be determined on a class-wide basis without individual adjudication." Waiting time penalties accrue when an employer willfully fails to pay wages due at the time of separation; the determination of whether wages were owed requires an employee-by-employee analysis of each individual's final pay, accrued and unpaid wages, and the circumstances of separation. The Court concluded that this inherently individualized inquiry precluded class treatment.
C. Class Definition (as Certified)
The Court adopted the following class definition:
"All current and former non-exempt, hourly employees of Aurelius Media Americas Inc. who worked in the State of California at any time from November 1, 2018 through the date of preliminary approval of any class settlement, who were subject to AMA's automatic meal period deduction in the NovaPay Solutions TimeTrack Pro timekeeping system."
The estimated size of the certified class is approximately 1,850 individuals. This figure is derived from AMA's payroll records for the class period and reflects the total population of non-exempt, hourly employees across all seven California facilities who were subject to the TimeTrack Pro auto-deduction. As noted above, the class encompasses employees at all seven facilities — not merely the three facilities where the attestation feature was not activated — due to the Court's rejection of AMA's subclass proposal.
D. Named Class Representatives
The Court approved all three named plaintiffs as class representatives:
•  Marisol Fuentes — a former Production Coordinator at Facility 2 (Studio City), employed from March 2019 to September 2021.
•  Derek Halloran — a former Post-Production Assistant at Facility 5 (Hollywood), employed from January 2020 to June 2022.
•  Yesenia Padilla — a current Audio Technician at Facility 1 (West Hollywood HQ), employed since August 2018.
The Court found that all three named plaintiffs were adequate and typical for the certified claim — the first meal period auto-deduction claim — despite their different facilities, divisions, and employment periods. The Court noted that the uniformity of the TimeTrack Pro auto-deduction across all facilities meant that each representative's claim arose from the same system and the same alleged deficiency, satisfying the typicality and adequacy requirements of California class action law.
E. Class Counsel
The Court appointed the following as class counsel:
•  Castellano Byrne & Salas LLP (lead counsel) — represented by Marco Castellano, Diane Salas, and Trevor Kim.
•  Veltrano Employment Law Group PC (PAGA co-counsel) — represented by Sandra Higuera.
The appointment of class counsel was not contested by AMA and is consistent with standard practice.
F. Court's Observation on Individual Damages
Finally, we note an important observation the Court made regarding damages. The Court commented that "individual damages calculations may be required" even within the certified class. This observation signals that, even on the certified first meal period claim, the Court recognizes that determining the specific amount of damages owed to each individual class member may require individualized inquiry — for example, identifying the specific shifts on which each employee missed a meal period, whether the employee was entitled to a premium for that shift, and the applicable hourly rate.
This observation has two practical implications. First, it preserves AMA's argument that damages are not susceptible to formulaic, class-wide calculation, which could complicate any future trial on damages. Second, and more importantly for settlement purposes, it provides leverage in settlement negotiations: Plaintiffs and their counsel may prefer a streamlined settlement with an agreed-upon allocation methodology over the complexity, expense, and risk of individualized damages proceedings. This dynamic tends to favor a negotiated resolution.
III. Assessment — Favorable and Unfavorable Aspects
We assess the Court's Order as a mixed result that, on balance, is more favorable than unfavorable to AMA. The denial of five of seven causes of action substantially narrows AMA's class-wide exposure and validates the defense strategy we have pursued throughout the certification process. However, the certification of the meal period auto-deduction claim — and in particular, the Court's rejection of the subclass argument and its characterization of the attestation feature — creates meaningful trial risk on the surviving certified claims.
A. Favorable Rulings
1. Denial of Certification on Five of Seven Causes of Action. The most significant favorable aspect of the Order is the denial of class certification on the rest period, off-the-clock/overtime, minimum wage, second meal period, and waiting time penalties claims. These were, collectively, the most exposure-heavy claims in Plaintiffs' case. Dr. Rennick's damages model attributed over $20 million in aggregate damages to these five claims (see Section IV.A below). Their exclusion from class treatment eliminates the prospect of class-wide liability on these theories and relegates them to individual claims that most class members are unlikely to pursue independently. Moreover, the claims that were denied — particularly the rest period and off-the-clock claims — were the most factually and legally uncertain for AMA, precisely because of their individualized nature. The denial of class treatment on these claims removes the systemic risk associated with them.
2. Dr. Makhija's Analysis Vindicated in Part. The Court credited AMA's variability evidence in denying certification on several claims, particularly the second meal period, rest period, and off-the-clock claims. Dr. Makhija's statistical analysis — which demonstrated statistically significant differences in shift lengths, scheduling patterns, and supervisory practices across AMA's 14 show units and 7 facilities — was central to this result. The Court accepted that working conditions varied significantly across the enterprise and that this variation precluded common proof on the denied claims. This vindication of Dr. Makhija's work also positions AMA favorably for trial on the certified meal period claim, to the extent AMA can argue that even within the certified class, individual variation may affect the merits and damages determinations.
3. Individual Damages Observation. The Court's comment that "individual damages calculations may be required" preserves AMA's argument that damages cannot be determined on a class-wide basis through a single formula or calculation. As discussed in Section II.F above, this creates leverage in settlement negotiations by increasing the complexity and risk that Plaintiffs would face in a damages phase, incentivizing Plaintiffs to accept a reasonable settlement rather than proceeding to a contested damages determination.
B. Unfavorable Rulings
1. Rejection of the Facility-Based Subclass Argument. The Court's refusal to limit the certified class to the three facilities where the attestation feature was not activated is the most consequential unfavorable ruling. The Court's finding that the low attestation feature utilization rates (ranging from 1.8% to 4.1%) at the four "active" facilities made the distinction between active and inactive facilities "functionally irrelevant" expands the certified class from a potential approximately 700 members (at Facilities 2, 4, and 7 only) to the full approximately 1,850 putative class members across all seven facilities. This expansion increases both the damages exposure and the settlement value of the case. It also undermines a key element of AMA's defense narrative — namely, that AMA took affirmative steps to provide a mechanism for reporting missed meal periods at the majority of its facilities.
2. The Court's Characterization of the Attestation Feature. The Court's statement that "a mechanism that employees do not know about is functionally equivalent to no mechanism at all" is a strong and unfavorable merits signal. This characterization essentially treats AMA's auto-deduction system as universally deficient, regardless of whether the attestation feature was technically available at a given facility. If this framing carries through to trial, it would significantly advantage Plaintiffs' argument that AMA bore the burden of ensuring employees were aware of and able to use the attestation feature, and that AMA's failure to achieve meaningful utilization rates amounts to a systemic violation. While this characterization was made in the context of a certification ruling — and the Court did not reach the ultimate merits — it nevertheless telegraphs the Court's likely view of the evidence and creates an unfavorable backdrop for any trial.
3. Breadth of the Common Question. The Court framed the common question broadly: whether the auto-deduction system denied meal period premium pay "without providing an adequate mechanism for employees to report missed or shortened breaks." This formulation tilts the merits analysis toward Plaintiffs because it focuses on the adequacy of the mechanism rather than on whether individual employees actually missed meal periods. At trial, AMA would prefer a narrower framing that requires each class member to prove that he or she actually missed a meal period and was denied a premium. The broad framing adopted by the Court suggests that the liability inquiry may center on the system's design and implementation, which is inherently common, rather than on individual employee experiences, which would be more favorable to AMA.
C. Neutral Aspects
The certification of the wage statement (Section 226) and UCL (Section 17200) claims is a neutral development. These claims are purely derivative of the underlying meal period claim and would have been certified under any scenario in which the meal period claim was certified. Their inclusion in the certified class does not materially alter AMA's exposure or strategy.
Similarly, the PAGA claim proceeding as a representative action is procedurally standard and was expected regardless of the outcome of the class certification motion. The PAGA framework operates independently of class certification, and the continued pendency of the PAGA claim was a foregone conclusion.
IV. Impact on Exposure Analysis
A. Reduced Exposure from Denied Claims
The denial of five of seven causes of action significantly reduces AMA's aggregate exposure. Plaintiffs' expert, Dr. Carolyn Rennick, presented a total damages figure of approximately $38.6 million across all claims. A substantial portion of that figure was attributable to the claims that were denied certification:
•  Rest period premiums: approximately $8.4 million
•  Off-the-clock overtime (adjusted): approximately $12.2 million
•  Wage statement penalties (derivative of denied claims): a partial component, estimated at $0.5–1.0 million attributable to the denied underlying claims
•  Waiting time penalties: included in Dr. Rennick's total, with the specific allocation embedded in the aggregate figure
With the denial of these claims, Dr. Rennick's headline damages figure is reduced dramatically. The remaining exposure is concentrated on the certified claims: the first meal period auto-deduction claim, the derivative wage statement claim, the UCL claim, and the PAGA penalties.
B. Defense Expert Comparison
AMA's defense expert, Dr. Eric Lindstrom, presented an aggregate damages estimate of approximately $5.8 million (excluding PAGA penalties). Dr. Lindstrom's methodology differed from Dr. Rennick's in several critical respects: Dr. Lindstrom applied a more conservative assumption regarding the frequency of actual meal period violations (as opposed to the mere application of the auto-deduction), used AMA's own TimeTrack Pro records to identify shifts where the recorded clock-in and clock-out times were consistent with a full meal period having been taken, and applied a lower hourly rate based on the weighted average of class member wages.
Importantly, Dr. Lindstrom's $5.8 million estimate was primarily attributable to the meal period and wage statement claims — that is, the claims that were certified. The claims that were denied accounted for only a small portion of Dr. Lindstrom's total because his methodology already reflected the individualized nature of those claims and the limited evidence supporting them. This means that Dr. Lindstrom's estimate remains largely intact as a defense valuation for the certified claims and provides a credible basis for AMA's position in settlement negotiations.
C. Updated Realistic Exposure Range
Based on our analysis of the Court's Order, the narrowing of certified claims, and the competing expert analyses, we present the following updated exposure table:
Our assessed realistic exposure range of $5–8 million reflects a midpoint between the parties' expert positions, adjusted for the Court's unfavorable characterization of the attestation feature (which increases Plaintiffs' merits leverage) and discounted for the inherent risk that Plaintiffs would face in proving individual damages at trial even on the certified claim. The PAGA component is assessed at the low end of the claimed range, consistent with the substantial judicial discretion to reduce PAGA penalties and the established pattern of PAGA settlements at a fraction of the statutory maximum.
V. Implications for Settlement Strategy
A. Updated Settlement Range
In our pre-certification settlement authority memorandum (dated August 15, 2023), we recommended a settlement range of $10–15 million. In light of the Court's Order, we update our recommendation as follows:
Updated recommended settlement range: $12–16 million (Gross Settlement Amount).
The rationale for adjusting the range upward from the pre-certification recommendation is twofold. First, the partial certification represents a moderately unfavorable development in that the certified class is broader than we had hoped. The rejection of the facility-based subclass argument expanded the class from approximately 700 to approximately 1,850 members, increasing the aggregate damages exposure proportionally. Second, the Court's unfavorable characterization of the attestation feature — and in particular the finding that the feature's low utilization rates render it "functionally" equivalent to no mechanism at all — increases Plaintiffs' leverage on the merits of the certified claim. In any settlement negotiation, Plaintiffs' counsel will point to this language as an indication that the Court has already signaled a favorable view of Plaintiffs' theory.
At the same time, the denial of five of seven causes of action significantly limits AMA's overall exposure and provides a strong counterargument in settlement discussions. The core message to Plaintiffs should be that while the certified meal period claim presents real trial risk, the vast majority of claims in the case have been denied class treatment, and Plaintiffs' remaining exposure is a fraction of their original $38.6 million ask.
The settlement should be structured to provide for a broad release of all class and PAGA claims, including the non-certified claims (rest period, off-the-clock, overtime, waiting time, minimum wage). A broad release is essential to eliminate the risk that individual class members pursue the non-certified claims through separate litigation. While the non-certified claims cannot be released through the class mechanism (because they were not certified), the settlement can be structured as a combined class and PAGA settlement in which individual class members who do not opt out are deemed to release all claims — certified and non-certified — arising from the facts alleged in the operative complaint. This structure is standard in California wage-and-hour class settlements and has been approved by courts routinely.
B. EPL Coverage Implications
AMA's employment practices liability policy with Pemberton Mutual Assurance Co. (Policy No. PMA-EPL-2022-00837) has been tendered and Pemberton has acknowledged coverage, subject to a reservation of rights as to PAGA penalties and claims arising from willful violations. The policy provides a $15 million aggregate limit with a $5 million self-insured retention (SIR). Defense costs incurred to date total approximately $2.8 million, substantially exhausting the SIR.
At a settlement in the recommended $12–16 million range, Pemberton's authorized contribution of up to $9.25 million — calculated as the $15 million aggregate limit, less the $5 million SIR (of which approximately $2.8 million has been applied to defense costs, with the remaining approximately $2.2 million to be applied to the settlement itself) — would cover the majority of the GSA. AMA's self-funded share at a $14–15 million settlement would be approximately $5–6 million, consisting of the remaining SIR amount plus any settlement amount exceeding Pemberton's authorized contribution.
We should engage Pemberton immediately to confirm the carrier's willingness to contribute within this range and to address any allocation concerns regarding the PAGA component. Pemberton's reservation of rights on PAGA penalties means that the carrier may resist contributing to the portion of the settlement allocated to PAGA civil penalties, as opposed to compensatory wage-and-hour damages. The settlement structure should be designed to maximize the allocation to covered wage-and-hour claims and minimize the PAGA allocation, consistent with the realistic PAGA exposure assessment of $500,000 to $1.5 million. Bernard Crawford of our firm's insurance recovery practice group will handle carrier coordination.
C. Mediation Timing
The Court's certification order strongly positions the case for immediate mediation. Post-certification is a natural inflection point for settlement discussions: both sides now have clarity on the scope of class-wide claims, the certified class size, and the legal framework within which any trial would proceed. Delaying mediation would serve no strategic purpose and could result in additional defense costs and the risk of further unfavorable developments.
We recommend scheduling Mediation Session #1 within two to three weeks — targeting the week of August 21–25, 2023, or, if scheduling conflicts prevent that timing, the week of August 28 through September 1, 2023.
The agreed-upon mediator is the Honorable Patricia Okoro (Ret.) of Westpark Dispute Resolution Inc., located at 1925 Century Park East, Suite 1700, Los Angeles, California 90067. Both sides previously proposed and agreed to Judge Okoro as the mediator for this matter, and her office has confirmed general availability during the late August timeframe. Judge Okoro has extensive experience with complex employment class actions in Los Angeles and is well-respected by both the plaintiff and defense bars. Her familiarity with the dynamics of partial certification cases and the PAGA framework will be an asset in facilitating a productive negotiation.
We also recommend considering the possibility of combining the class action mediation with the Aldrich individual action (Case No. 22STCV41087, pending before Hon. Catherine Villanueva, Department 52). The Aldrich matter involves separate but related claims by a former AMA executive, and resolving both matters through a coordinated mediation process would achieve comprehensive finality for AMA. If Mediation Session #1 focuses exclusively on the class action, a Mediation Session #2 could be scheduled to address both the class action (if Session #1 does not result in a resolution) and the Aldrich matter jointly. This approach would allow AMA to achieve a global resolution of its California employment litigation exposure.
VI. Interlocutory Appellate Review — Not Recommended
Under California law, AMA has the right to seek interlocutory appellate review of the certification order by petitioning the Court of Appeal for a writ of mandate pursuant to California Rules of Court, Rule 8.495 et seq. A writ petition would ask the appellate court to vacate or modify the trial court's certification order. We have carefully considered this option and recommend against it for the following reasons:
1. The Partial Certification Order Is Defensible. The Court applied the correct legal framework, relying on the California Supreme Court's decisions in Brinker Restaurant Corp. v. Superior Court (2012) 53 Cal.4th 1004, Sav-On Drug Stores, Inc. v. Superior Court (2004) 34 Cal.4th 319, and Duran v. U.S. Bank National Assn. (2014) 59 Cal.4th 1. The Court made factual findings supported by the record, including the auto-deduction data and the attestation feature utilization rates. While we disagree with the Court's characterization of the attestation feature and its rejection of the subclass argument, these were factual determinations within the trial court's discretion, and an appellate court would review them under a deferential standard.
2. Appellate Review Is Discretionary and Rarely Granted. Unlike appeals of right, writ petitions challenging certification orders are subject to the appellate court's discretionary decision whether to issue an order to show cause and entertain the petition on the merits. The California Courts of Appeal grant such petitions in a small minority of cases, and the standard for intervention is high: the petitioner must demonstrate that the trial court's order constitutes a clear abuse of discretion or a departure from established legal principles. Given the defensible nature of the order, the likelihood of the Court of Appeal granting review is low.
3. Appellate Proceedings Would Cause Substantial Delay. Even if review were granted, the appellate process would delay resolution of the case by an estimated 12 to 18 months. During that period, defense costs would continue to accrue, and AMA would remain exposed to the risk of an unfavorable trial outcome if the certification order were ultimately upheld. The delay would also forfeit the current window for settlement negotiations at a time when both sides have strong incentives to resolve the case.
4. The Denial of Five of Seven Causes of Action Is a Strong Result. Seeking appellate review of the partial grant of certification risks "winning the battle but losing the war." An appellate challenge would draw judicial attention to the certified meal period claim — arguably the strongest claim in Plaintiffs' case — and could result in unfavorable appellate dicta on the merits. Moreover, Plaintiffs could cross-petition for review of the denial of certification on the five denied claims, potentially reopening issues that are currently resolved in AMA's favor.
5. Cost-Benefit Analysis Disfavors Appellate Review. The estimated cost of appellate proceedings — including preparation of the writ petition, the record on appeal, briefing, and oral argument — is in the range of $200,000 to $300,000. This expenditure is disproportionate to the marginal benefit that might be obtained (at best, a reduction in the certified class from approximately 1,850 to approximately 700 members), particularly when weighed against the cost savings of a prompt settlement within the recommended $12–16 million range.
For all of these reasons, we strongly recommend that AMA not pursue interlocutory appellate review and instead direct its resources toward achieving a favorable settlement through mediation.
VII. Recommendations
Based on the foregoing analysis, we make the following recommendations:
1. Do Not Seek Interlocutory Appellate Review. The partial certification order represents the expected outcome, and the risk-reward calculus does not favor an appeal. The order is defensible, appellate review is discretionary and rarely granted, and the process would delay resolution by 12 to 18 months at a cost of $200,000 to $300,000. AMA's resources are better allocated to settlement efforts.
2. Proceed to Mediation Promptly. We recommend contacting the Honorable Patricia Okoro (Ret.) at Westpark Dispute Resolution Inc. immediately to schedule Mediation Session #1 for late August 2023, targeting the week of August 21–25, 2023. If that week is unavailable, we should secure the earliest available date in the following two weeks. We will coordinate with Castellano Byrne & Salas LLP and Veltrano Employment Law Group PC on scheduling.
3. Prepare a Settlement Authority Memorandum. We will prepare a settlement authority memorandum for client approval recommending authority of $12–16 million for the class action (Gross Settlement Amount), with a combined authority covering the Aldrich matter ($1.5–3.0 million) if both matters are addressed in the same mediation process. The total maximum authority sought will be up to $18 million. We note that settlement authority exceeding $5 million requires approval from Jonathan Mercer, President of AMA, and the AGMG Board's Audit and Risk Committee, pursuant to Section 7.4 of AMA's Outside Counsel Guidelines. We recommend that this approval process be initiated immediately to ensure that AMA has the necessary authority in place before the mediation session.
4. Engage Pemberton Mutual Assurance Co. Immediately. Bernard Crawford of our insurance recovery practice group will send an updated claim information letter to Pemberton advising of the certification order, the anticipated settlement range, and the need for Pemberton to authorize a contribution within the identified range. The letter should address allocation concerns regarding the PAGA component and request a meeting with Pemberton's claims adjuster to discuss the settlement structure. We recommend that the claim information letter be sent no later than Wednesday, August 16, 2023, to allow sufficient time for Pemberton to respond before the mediation session.
5. Prepare a Mediation Brief. We will prepare a comprehensive mediation brief that accomplishes the following objectives:
(a) Frames the partial certification as a mixed result that creates substantial trial risk for Plaintiffs on the merits. Even with the auto-deduction common question certified, Plaintiffs must still prove at trial that individual class members actually missed meal periods and were denied premium pay. This is a heavy evidentiary lift, particularly in the absence of individual testimony from each of the approximately 1,850 class members.
(b) Presents AMA's assessment of realistic exposure ($5–8 million) using Dr. Lindstrom's analysis, which remains largely intact for the certified claims and provides a credible basis for AMA's valuation.
(c) Structures a proposed settlement to maximize Pemberton's contribution by allocating payments to covered wage-and-hour claims (meal period premiums and wage statement penalties) and minimizing the allocation to the PAGA component, which is subject to Pemberton's reservation of rights.
6. Consider the Aldrich Matter Timing. The Aldrich individual action (Case No. 22STCV41087) remains pending before the Honorable Catherine Villanueva in Department 52. AMA's cross-claims in the Aldrich matter — including claims for breach of the Employment Agreement (Section 9.4, restrictive covenants), trade secret misappropriation under the California Uniform Trade Secrets Act (CUTSA), breach of fiduciary duty, and conversion — provide AMA with affirmative leverage in that proceeding. The class certification order in the Fuentes matter has no direct legal bearing on the Aldrich matter, but resolving both matters through a coordinated mediation process would achieve comprehensive finality for AMA and eliminate the distraction and expense of ongoing parallel litigation.
7. Continue Monitoring the Non-Certified Claims. Although the rest period, off-the-clock, overtime, minimum wage, and waiting time claims were denied class treatment, these claims remain available to individual class members. Any class settlement should include a broad release covering all claims — both certified and non-certified — arising from the facts and circumstances alleged in the operative complaint, to prevent follow-on individual litigation. We will work with class counsel and the mediator to structure the release language to achieve this objective, consistent with prevailing standards for California wage-and-hour class settlements.
VIII. Conclusion
The August 11, 2023 partial certification order is a manageable outcome that positions the case for a favorable settlement. The denial of the majority of Plaintiffs' claims — including the rest period, off-the-clock/overtime, minimum wage, second meal period, and waiting time claims — substantially narrows AMA's class-wide exposure and eliminates the prospect of class-wide liability on the most speculative and exposure-heavy theories in Plaintiffs' case.
The certification of the first meal period auto-deduction claim was the expected result, given the common-proof issues created by AMA's uniform use of the TimeTrack Pro timekeeping system and the gaps in the activation and communication of the Missed Meal Attestation feature. While the Court's rejection of the subclass argument and its unfavorable characterization of the attestation feature expand the certified class beyond our preferred outcome, these rulings do not fundamentally alter the settlement calculus. The updated settlement range of $12–16 million (GSA) reflects these dynamics and accounts for both the increased leverage Plaintiffs derive from the broader class and the reduced exposure resulting from the denial of the majority of claims.
AMA's immediate priorities are:
1.  Schedule mediation with Hon. Patricia Okoro (Ret.) for late August 2023;
2.  Obtain settlement authority of up to $18 million (combined) through the required corporate approval channels;
3.  Engage Pemberton Mutual Assurance Co. regarding settlement contribution authorization and PAGA allocation; and
4.  Prepare mediation materials, including a comprehensive mediation brief.
We are available to discuss this analysis at the client team's convenience and recommend a strategy call this week — ideally Wednesday, August 16, or Thursday, August 17 — to align on next steps and confirm the action items set forth in this memorandum. Please let us know your availability.
CALDERWOOD & HARKNESS LLP
By: ________
Renata Vasquez, Partner Employment Litigation Practice Group
By: ________
Devon Archer, Senior Associate Employment Litigation Practice Group
CONFIDENTIAL — ATTORNEY-CLIENT PRIVILEGED / ATTORNEY WORK PRODUCT This memorandum is a privileged and confidential communication prepared by Calderwood & Harkness LLP for the exclusive use of Aurelius Media Americas Inc. and Aurelius Global Media Group. This memorandum is protected by the attorney-client privilege and the attorney work product doctrine. It should not be disclosed to any third party without prior written consent of counsel. Disclosure to any third party may result in waiver of applicable privileges.
Component | Plaintiffs' Position | Defense Position | Our Assessment
First Meal Period Premiums | $16.3M | $3.4M | $4–6M
Wage Statement (§ 226) | $1.5M | $0.8M | $0.5–1.0M
PAGA Penalties | $12.2M | $0.5–1.0M | $0.5–1.0M
UCL Restitution | Derivative | Derivative | $0 incremental
Total | ~$30M | ~$5M | $5–8M

CONFIDENTIAL — ATTORNEY-CLIENT PRIVILEGED / ATTORNEY WORK PRODUCT

MEMORANDUM

CALDERWOOD & HARKNESS LLP

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